AUSTRALIAN manufacturers are being hit hard by US tariffs, with businesses previously paying no tariffs now being forced to pay anywhere from 10 per cent to 37.5 per cent extra to sell into the US.

The Australian Automotive Aftermarket Association (AAAA) said it has called on the federal government to prioritise trade discussions with the US to secure relief from the 25 per cent tariff currently applied to Australian automotive component exports under the US Section 232 provisions.

The tariff, originally introduced in 2018 and reintroduced in May 2025, was designed to protect America’s domestic car manufacturing base. But the AAAA said that for Australian exporters who specialise in aftermarket parts that are not sold to US car manufacturers, it remains a significant barrier to competitiveness in our most important market.

AAAA CEO Stuart Charity said the tariff was a critical issue for the survival of Australia’s remaining automotive component manufacturing sector.

“Our industry has worked hard to remain globally competitive despite the end of local vehicle manufacturing,” Mr Charity said.

“We now produce world-class, niche components that are in demand overseas, but a 25 per cent cost impost in our largest export market is a heavy burden to overcome.”

“The tariff has nothing to do with the quality or safety of Australian products, which are widely recognised as meeting or exceeding global standards.

“This is about ensuring that our exporters can compete on a level playing field. The US market is vital to the future of our industry, and removing this tariff would be a game changer for jobs, innovation, and investment in Australia.”

Stuart Charity

Businesses contacted by GoAutoNews Premium said that the tariffs are affecting sales but they are more angered by the inconsistencies in US policies and at the percentage being charged.

Pfitzner Performance Gearboxes’ sales manager Tom Perham said a gearbox sold into the US for $A30,000 six months ago could now cost the customer in the US an extra $A3000 or $A11,250 – depending on how the tariff is calculated by the shipping agents who collect the government charge.

“We’ve gone from a free trade agreement with no tariffs, to an inconsistent position without any structured tariff level,” he said.

“It comes down to whoever is processing the customs on that particular delivery and the person on the day. We have seen anything from 10 per cent to 37.5 per cent on our products.

“The discrepancies are from the people working in the shipping companies – FedEx, DHL and so on – and I think they get confused because there’s a 10 per cent standard fee and then a 25 per cent automotive tariff and then all the shipping companies have their own 2.5 per cent processing fee.”

“It’s meant to be 10 per cent plus 25. Some of our gearboxes are $A30,000 and some of the dealers may buy $A150,000 of stock, so that’s an extra $A40,000 to $A50,000 for their order just for the pleasure of importing it.

“Six months ago, it was zero.”

Pro-Race Performance Products, which also makes components in Australia for the US market, is in a similar position. Its managing director and owner, Glenn Paine, said he was battling with fluctuating tariff percentages and the uncertainty facing exporting to the US in the future.

He said his Port Melbourne-based company, which makes performance parts including engine harmonic balancers started exporting to the US in 1986. Prices have not yet been raised for its US customers but the indications are that may soon happen.

“We have been paying 12.5 per cent tariffs (2.5 per cent auto part related and 10 per cent general baseline tariff rates) since the US government changed, and from August 18, that’s increased to 25 per cent for automotive,” he said.

“What’s not clear – and I am waiting for an answer from my customs brokers in the US – is that the 25 per cent overrides the existing 10 per cent baseline tariff.”

The effect of the tariffs has seen the price of the high-end harmonic balancers, designed for motorsport applications and to meet stringent US safety regulations, rise by $US30 to $US40 each. They sell to automotive distributors in the US for about $US300 each.

Pro-Race has a contract with a major OEM crate-engine program in the US that has been in place for decades. 

“It only takes one advantaged domestic manufacturer to demonstrate a cost saving and we could lose that contract overnight,” he said.

Mr Paine said that the tariffs are designed to protect US manufacturers and act as an incentive for overseas companies to manufacture in the US.

“But manufacturing in the US isn’t an option for us when the government makes continuous and major changes to the rules and makes the future so undecided,” he said.

“What happens, for example, if this US government loses power – will the next government continue with the same policies or do all the rules change again?”

Mr Paine said the erratic tariff rates were putting all exporting businesses at risk.

“These are concerning times,” he said.

“It’s no exaggeration that the tariffs have put our business at risk.”

Pfitzner’s Mr Perham said that 80 per cent of what his company makes goes to the US “so we have been heavily impacted.”

“We have been trying to work with companies in the US so they could put some pressure on their government. We get that the US is trying to protect their OEM businesses but some of the products we make go into cars that are 60 years old – it’s a niche product that we make 10s of a year, not 10s of thousands of units.

“Hopefully we can get some logic in all this. The problem the US government is trying to fix is with new automotive products, not the aftermarket products. We’re asking for a bit of a break.”

PPG, which is based in South Australia and employs 18 people and has been operating since 2002, makes manual gearboxes for high-performance cars used for competition and for street applications. 

“They are designed to fit into existing cars and will suit a variety of uses, including motorsports such as drifting, circuit racing,  drag racing and tarmac rallying, as well as hotted-up street cars,” he said.

“We send 80 per cent of what we make to the US, 10 per cent for Australia and 10 per cent to other markets.”

Mr Perham said PPG makes for a range of brands, and in many cases, has competitors in other markets including the US.

“Our main competitors are not in the US so we’re lucky in that they have their own tariff problems,” he said.

“The tariff has highlighted that some manufacturers have been sourcing their products from outside the US, shown by some of our competitors suddenly having big price increases.“That’s probably been the only ‘positive’ of the tariff issue.”

The AAAA is now urging the federal government to:

1. Re-engage with their US trade counterparts to seek an exemption or reduction for Australian automotive components under the Section 232 provisions.
2. Highlight the high quality and strategic value of Australian-made components in bilateral trade discussions.
3. Treat tariff relief as a key priority for supporting advanced manufacturing and export growth.

Mr Charity said that the government has talked about not just protecting, but growing domestic manufacturing. 

“Here is a clear, immediate test of that commitment,” he said.

“This is not about pointing fingers. It’s about working constructively with our friends to find a solution that supports both countries’ automotive industries. 

“For some of our exporters, this issue could make or break their ability to maintain an Australian manufacturing base.”

Just prior to publication, asked about progress with the Australian government on the tariff issue,  the AAAA said: “There has been no official word, but AAAA has been having encouraging conversations.”